The picture painted in Moxian's disclosure is not pretty, yet demonstrates one good reason why few startup operations would ever seek to go public.

Any listed company will tell you there is good news and bad news to being publicly traded.

The good news is you get noticed when you tell the world all about yourself. The bad news is you get noticed when you tell the world all about yourself.

Just ask Moxian Inc., which filed its financial statement today for the quarter ended Dec. 31. The picture painted within the 29 pages is not pretty, but it demonstrates one good reason why few startup operations would ever seek to go public in their early days.

Moxian (Nasdaq: MOXC), which is attempting to ramp up a platform that integrates social media and business, reported that for the three months ended Dec. 31, it collected $61,086 in overall revenue. Most of that came from one-off projects developing software for clients. With 97 employees costing $1.5 million, the company said it lost $1.97 million during the period, or 3 cents per share, though that was better than the $3.1 million lost a year earlier.

Indeed, Moxian's losses have been mounting and there is ongoing concern whether the company can stay in business.

A Public Life

Based in Shenzhen, originally a fishing village and now home to many startups, the company completed its initial stock offering of 2.5 million shares in November 2016 at $4 per share. But the $8.5 million it collected from the IPO is now gone, most of it used to repay previous loans.

The company said future funds, if any, would likely come from major shareholders or other investors if it goes back to the public markets or seeks a private issuance. One of its directors has already granted the company $2.5 million in unsecured loans.

And the money is needed. According to the company's filing, Moxian is now carrying $5.8 million in current liabilities and has amassed more than $40.6 million in accumulated losses. As of the end of the year, it had $882,260 in total assets. Overall, it said, it had a working capital deficit of $5.4 million.

To compound its recent troubles, the company has reported that it's been late in submitting filings, and that top executives there concluded in September that the company's disclosure controls and procedures regarding its reporting to regulators were essentially "ineffective." Its former CEO, who had joined the company in 2015 and had voting control over 56 percent of the company as of August, left Moxian at about the same time.

The Usual Struggles

While the disclosure is unusual, the struggles are not. Of the nearly 100 employees, 44 are in research and development, the company said, with 20 in sales and marketing. Operating in Shenzhen and Beijing, the company has developed a platform to allow small- and mid-sized businesses to conduct advertising campaigns and promotions to attract customers.

With its main development work now done, it said the platform has been completed, both as mobile apps and a website www.moxian.com.

One bright spot perhaps, according to the company disclosure, is that its incorporation state of Nevada does not have a corporate income tax and it has accumulated operating losses of about $8.8 million, which will be available to offset future income for the next 18 years. That is, of course, if they can start making money.

The company's shares in New York closed up 2 percent today to $3.57 per share.